Criteria for sourcing from developing countries

Abstract

Purpose -Increasingly, sourcing decisions are routinely including contract manufacturers and suppliers in developing countries. While many studies have researched and identified the criteria for selecting suppliers in general terms, there has been a dearth of studies on the criteria for choosing amongst suppliers in developing countries including suppliers in Eastern Europe, Asia and Africa. The purpose of this paper is to investigate the criteria for choosing amongst suppliers in different developing countries. Design/methodology/approach -The methodology consists of a series of case studies involving six firms some of which are sourcing from developing countries and some that are based in developing countries and supply lead firms in developed countries. Findings -Cost, physical and cultural proximity, political factors and reliability are found to be the primary criteria for sourcing decisions that include suppliers in Eastern Europe, Asia and Africa. Further, the paper identifies why these criteria are used and the drawbacks in using them.Research limitations/implications -A key limitation of the study is generalizability. Based on the use of a case study methodology, caution should be exercised in generalizing the results of the study. Originality/value -In spite of the limitations, this paper contributes to the extant literature on sourcing from developing countries. It provides valuable insights for global purchasing managers interested in sourcing from developing countries in terms of the criteria for choosing a particular location for sourcing and selecting a supplier within a given location.

Sourcing from Africa: A Systematic Review and a Research Agenda

“…Cilliers and Nagel ; Oke et al . ; Ras and Vermeulen ). Ways of reducing bias were not commonly discussed, which is a shortcoming in itself, but also makes it difficult for future researchers to estimate typical response and other biases among African respondents.…”

“…It thus offers new and growing markets for foreign enterprises, and is a promising sourcing context for firms across industries (Gu ; Oke et al . ). In fact, some companies are leaving the previously cost‐effective China and searching for suppliers in other emerging markets such as Africa (Kumar et al .…”

Supplier risk management in direct sourcing from China

“…2 Though the tools of risk identification and risk management are established in literature Mentzer, 2008b, 2008a;Norrman and Jansson, 2004;Oke et al, 2009;Zsidisin et al, 2004), there are few studies in risk management addressing risk management in direct sourcing from China.…”

“…Apart from performance risks like high cost, poor quality and delivery reliability, relational aspects like cultural differences and opportunistic behaviour also seem to have a strong influence on risks and risk management in an international setting (Berry and Collier, 2007;Canbolat et al, 2008;Cho and Kang, 2001;Manuj and Mentzer, 2008b;Nassimbeni and Sartor, 2006;Oke et al, 2009). By acknowledging the existence of both risks related to the performance and relational risks in direct sourcing from LCC, we need to address how these risks can be managed.…”

How managers make sourcing decisions about low cost regions: Insights from perceptual mapping

“…Executives at the larger firms held positions ranging from Purchasing Director to General Manager. Interviews were conducted by one of the authors in person and lasted from 1 to 3 h. More details about the interview questions can be found in Oke, Maltz, and Christiansen (2009).…”